Linking Nonfinancial Metrics to Strategy and Culture
The National Association of Corporate Directors recently convened a meeting of Fortune 500 audit and compensation committee chairs to discuss the key issues and challenges the board faces in the selection and use of nonfinancial metrics. A free report on the results of that meeting is available from NACD.
Three key takeaways emerged from the meeting.
- Boards should link nonfinancial metrics to strategic and cultural objectives.
- Audit committees should leverage internal audits to meet the challenge of nonfinancial data quality oversight.
- Compensation committees are focusing on the role nonfinancial metrics play in compensation-plan design and in eventual payouts.
The full report from the meeting includes:
- key questions for boards to ask about nonfinancial metrics
- the four critical roles for internal audit in support of governance over nonfinancial reporting
- special considerations for the compensation committee